Kyma Capital Limited Vedanta Limited

Kyma Capital Limited

Vedanta Limited (Bloomberg: VEDL IN (NSE/BSE), VEDL US (NYSE ADS))

Kyma concerns regarding transfer of value

11 November 2020

Over recent months, Vedanta Limited and its subsidiaries (“Vedanta”) have made loans amounting to $956 million to Vedanta Resources Limited and its wholly owned subsidiaries (“Parent”). It is Kyma Capital’s view that this is a clear-cut case of siphoning off funds and value that belongs to Vedanta Limited, and all its stakeholders.

We have attached our correspondence with the Board, which details our concerns.

- First, this money is being loaned to a near-insolvent Parent. This has been affirmed by both Vedanta Limited auditors as well as Vedanta Resources auditors; - Second, this is a related party transaction with a controlling shareholder which should, naturally, have a higher level of scrutiny. Instead, the Vedanta Board seems to have been asleep at the wheel; - Third, given the timescales involved it seems apparent to Kyma that Vedanta was directly or indirectly funding its own delisting; - Fourth, Indian law is clear on Independent Director duties and has punitive penalties. In Kyma’s view, these duties have very clearly been breached. - Fifth, Cairn India Holdings Limited (CIHL) is a very important subsidiary of Vedanta, with its main asset being Cairn Energy Hydrocarbons Limited (CEHL). The auditor for both entities is an obscure accounting firm in Gurgaon, India with no statutory authorisation to audit UK companies. - Sixth, the CIHL Board is staffed with professional service directors. On the most recent earnings call, the CFO ascribed this Board as signing off on the loan to Parent. - Seventh, Vedanta Limited is guaranteeing the incurrence of debt at CIHL. This money is then promptly loaned to Parent. We question how this is compliant with the RBI’s Foreign Exchange Management Act. - Finally, we are disappointed in our Independent Directors. We note the resignation of Ms Lalita Gupte following our correspondence with the Board (in itself, a red flag). However, the continued acquiescence of the remaining directors is puzzling, and at odds with their professional credentials built up over many years.

Given this fact pattern, we have requested the Board to immediately recall these loans from Parent, and commission a special audit by a “big four” accounting firm to allay investor concerns regarding accounting and governance. We have not had a substantive response to date.

As an immediate next step, we are in the process of filing complaints with SEBI for a) possible accounting manipulation, and b) corporate governance. We will also be raising our concerns with other regulatory and legal authorities over the coming weeks.

About Kyma Capital

Kyma Capital Limited (“Kyma”) is a London‐based investment manager and is authorized by the Financial Conduct Authority. Kyma manages Kyma Capital Opportunities Fund, which is an all-weather, event‐driven fund that invests in both public and private securities.

For any enquiries, please contact

Renata Machado

Chief Operating Officer [email protected]

Kyma letter sent to Vedanta Board of Directors, dated 11 Nov 2020

11 November 2020 Attention: The Board of Directors

Dear Directors, We refer to our letters dated 15 October and 30 October, in which we raised serious corporate governance concerns, as well as bafflement on the unexplained switch in auditor for an important subsidiary. You have chosen not to respond to our concerns at all.

Further Loans Granted to Parent Instead, you have signed off on further loans to Vedanta Resources. The total money loaned for the benefit of one shareholder now amounts to $956 million. We are amazed at the siphoning of this very significant sum, especially as it amounts to approximately 40% of the current market value of Vedanta Limited equity held by minority investors. The Company’s Chief Financial Officer, Mr G R Arun Kumar, stated on the most recent earnings call that this disbursement “did not need approval from the Vedanta Limited Board”, as it “had received independent board approval from Cairn India Holdings Limited (CIHL)”. This is of course a legal fiction. Your attempt to absolve yourself of responsibility for this very significant related party transaction, by pointing instead to some rubber-stampers, is wholly unfounded and entirely indefensible.

Governance Failure(s) at CIHL - Board It is clear to us that the governance controls in place at CIHL have failed. We have previously expressed concern at the “professional service directors” that constitute the board of CIHL. The two signatories on your most recent CIHL accounts are Gayle Swanson and Marc Harris, who are professional directors at Vistra, a corporate services provider. Their Vistra colleagues Paul Cooper and Julius Bozzino sit on the board at Cairn Energy Holdings Limited (CEHL), and serve as directors on several dozen boards each.

Governance Failure(s) at CIHL - Obscure Auditor The other significant concern with the control structure at the Jersey company, CIHL, of course, is your Gurgaon-based auditor, VD & Co. Until at least October 2019, EY Jersey was auditing this entity. Without any explanation or apparent rationale, the most recent audit was instead conducted by VD & Co. EY has continued to audit most of

Resignation of Independent Board Member On the same day as the quarterly earnings release, we note the resignation from the Board of Ms Lalita Gupte. Considering this is shortly after Kyma started raising some very serious concerns with the Board, we believe this is yet another red flag.

Next Steps We would repeat that the only way this Board of Directors can try to absolve itself, is by: First, recalling immediately the $956 million loans outstanding to Vedanta Resources and its subsidiaries, and Second, commissioning an independent special audit by a “big four” accounting firm.

Despite our repeated urging, you have not provided a substantive response to either our 15 October or our 30 October letters. As an immediate next step, we are in the process of filing an investor complaint with SEBI, asking the authorities to focus on a) possible accounting manipulation, and b) corporate governance. The irony of having to look to SEBI for recourse when we have a former Chairman of SEBI, Mr UK Sinha, as an Independent Director, is not lost on us (nor indeed, we expect, will be lost on the authorities). We also expect to bring these concerns to the attention of other regulatory and legal authorities.

Yours sincerely,

Akshay Shah Chief Investment Officer Kyma Capital Limited 22-25 Portman Close London W1H 6BS

Copy RNS release dated 11 November 2020

Kyma Presentation sent to Vedanta Board of Directors, dated 30 Oct 2020

CONFIDENTIALCONFIDENTIAL Disclaimer

IMPORTANT NOTICE These presentation slides, their contents, appendices and the accompanying verbal presentation (the “Presentation”) have been prepared by Kyma Capital Limited, a private company incorporated in England with registered number 11237279 and registered office address at 22-25 Portman Close, London, W1H 6BS (“Kyma”). Kyma is authorised and regulated by the Financial Conduct Authority, FRN 805771. This Presentation is preliminary in nature and based solely on publicly available information as of the date hereof. It is provided to the addressee for discussion purposes only and does not constitute or contain legal advice, investment or restructuring advice or an investment or restructuring recommendation. Neither Kyma nor any of its directors, officers, employees, agents or advisers or any other person makes any representation, warranty or undertaking express or implied, as to the accuracy or completeness of the contents of this Presentation. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any assumptions, statements or proposals contained in the Presentation, which are illustrative only. No responsibility or liability is accepted by any such person for the accuracy or completeness of the contents of this document or for any errors, misstatements or omissions herein. This Presentation is confidential and should not, unless otherwise agreed in advance in writing by Kyma, be copied, distributed, published or reproduced (in whole or in part) or disclosed by the recipient to any other person.

CONFIDENTIAL 2 1. Loan Granted to Parent. Borrower is Twin Star Holdings Limited

CONFIDENTIAL 3 Corporate Structure Chart

Twin Star Holdings Limited

37.11%

Vedanta Limited

100%

Cairn India Holdings Limited (“CIHL”) Key Listed Company

India

100% 51.6% Jersey

UK/Scotland Cairn Energy AvanStrate Inc. Hydrocarbons Mauritius ('ASI') Limited (“CEHL”) Japan

Source: Company disclosures and Kyma research CONFIDENTIAL 4 Note: Extract of the full Corporate Structure CIHL loaned $293M to Twin Star

In the quarter ending 30 June 2020, Cairn India Holdings Limited (“CIHL”) loaned $293 million to Twin Star Holdings (“Twin Star”)

Source: Annual Report Cairn India Holdings Limited, year end Mar 2020 CONFIDENTIAL 5 2. Indian Law is Clear on Independent Director Duties

CONFIDENTIAL 6 Corporate Governance

As per the 2013 Companies Act: the general duties of directors under the CA 2013 are as follows: to act in good faith in order to promote the objects of the company for the benefit of its members as a whole; to act in the best interest of the company, its employees, shareholders, community and for the protection of environment; to exercise due and reasonable care, skill and diligence and independent judgment;

As an Independent Director, he has the same general legal responsibilities to the Company as any other Director including all fiduciary duties, responsibilities, statutory obligations and liabilities of directors prescribed in law including the Companies Act, 2013 To act honestly and in good faith in the best interests and objects of the Company, its employees, its shareholders, the community and for protection of environment; To exercise due care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances and shall also exercise independent judgment;

Source: Companies Act 2013, Chapter XI, Appointment and Qualifications of Creditors, 166. Duties to Directors CONFIDENTIAL 7 3. The Lender for this Loan is CIHL, an Important Subsidiary of Vedanta.

CONFIDENTIAL 8 CIHL is a very material subsidiary of Vedanta

In terms of assets and book equity, CIHL is about 1/3rd the size of Hindustan Zinc; clearly a very important asset owned by Vedanta Limited

% of Total % of Book Vedanta Limited Unconsolidated* 31 Mar 2020 Assets Equity

(Rs. in Crore) Non-current assets 120,614 Current assets 18,836 TOTAL ASSETS 139,450 of which: Hindustan Zinc Limited 44,398 31.8% 63.5%

Cairn India Holdings Limited (CIHL) 13,806 9.9% 19.8%

Note: Extract from Vedanta Limited Standalone balance sheet. Source: Annual Report Vedanta Limited, year end Mar 2020 CONFIDENTIAL 9 4. CIHL is a Jersey Company; its Main Asset is CEHL, a UK Company

CONFIDENTIAL 10 CIHL / CEHL: Corporate Structure

Twin Star Holdings Limited

37.1%

Vedanta Limited

Cairn India Holdings Limited (“CIHL”)

Key Listed Company

India Cairn Energy Hydrocarbons Jersey Limited** (“CEHL”) UK/Scotland

Mauritius ** Principal place of business is in India

Note: Extract of the full Corporate Structure CONFIDENTIAL 11 Source: Company disclosures and Kyma research 5. CIHL has Some Puzzling Disclosures in its Accounts

CONFIDENTIAL 12 Cash Flows Disclosed in Latest Annual Report

Twin Star Holdings Limited

37.1%

Loan after Mar 2020: $293M

Guarantee for loan Vedanta Limited facility FY Mar 2020: $500M Dividends FY Mar 2020:$300M

Cairn India Holdings Limited (“CIHL”)

Dividends FY Mar 2020: $554.5M Since year end: $105.0M Cairn Energy Hydrocarbons Limited** Note: Extract of the full Corporate Structure CONFIDENTIAL 13 Source: Company disclosures and Kyma research ** Principal place of business is in India 6. Control Structures at CIHL / CEHL – Directors

CONFIDENTIAL 14 Control Structures: Directors at CEHL

3 of the four current Directors for Cairn Energy Hydrocarbons Limited (“CEHL”)

Paul Cooper and Julius Bozzino are professional directors from Vistra, a corporate services provider CONFIDENTIAL 15 Source: Companies House Control Structures: Directors at CIHL

2 of the three current Directors for Cairn India Holdings Limited (“CIHL”)

Gayle joined Vistra Jersey as Head of Funds in March Marc joined Vistra in July 2018, following Vistra’s acquisition 2019. She currently leads the fund accounting and of the Deutsche Bank Corporate Services Division. He administration businesses on the Island. currently leads the Commercial Real Estate and Capital Markets business on the Island. Gayle has over 19 years’ experience in the funds Prior to joining Vistra, Marc was at Deutsche Bank Jersey for industry, having worked for Link Asset Services, BNP 4 years where he was Head of Corporate Services and, prior Paribas SA, Ernst & Young and PwC. Gayle has acted to that, worked at an independent Trust Company Service as a director on both regulated and unregulated boards Provider where he specialized in the delivery of director and and has significant experience with various alternative company secretarial services to SPVs. asset classes including private equity, real estate and Marc sits on the boards of a number of companies such as infrastructure. She has a proven track record of capital market issuance vehicles, aircraft leasing vehicles and establishing and building key client relationships and asset holding vehicles for large institutional investors investing has developed a number of relationships with key in numerous asset classes. He acts or has acted on the board individuals in industry. of a number of funds in private equity and real estate sectors and uses his experience and knowledge to add value and provide good corporate governance on these SPVs. Gayle Swanson and Marc Harris are professional directors from Vistra, a corporate services provider Note: As disclosed in EY audited 2019 report. No disclosure in 2020 report CONFIDENTIAL 16 Source: https://www.vistra.com/people/ 7. Control Structures at CIHL / CEHL – Auditor

CONFIDENTIAL 17 Control Structures: Auditor Change at CIHL

Previously audited by EY, since at least 2016

Source: Annual Reports Cairn India Holdings Limited from 2016 to 2019

Now Audited by VD & Co. Starting sometime after Oct 2019

CONFIDENTIAL 18 Source: Annual Report Cairn India Holdings Limited, year end Mar 2020 Control Structures: Auditor: VD & Co

CONFIDENTIAL 19 Source: http://www.vdandco.in/resource/about_Us.aspx 8. VD & Co: UK Statutory Auditor?

CONFIDENTIAL 20 UK Audit Rules

CONFIDENTIAL 21 Source: https://www.gov.uk/audit-exemptions-for-private-limited-companies VD & Co. not listed as a statutory auditor in UK

Source: http://www.auditregister.org.uk/ CONFIDENTIAL 22 9. Vedanta Limited Auditors Clearly Place Great Reliance on these Subsidiary Audits

CONFIDENTIAL 23 S.R. Batliboi clearly state their reliance on the audit work conducted by subsidiary auditors

Note: S.R. Batliboi & Co. LLP (“SRB”), Auditor of Vedanta Limited, is an affiliate of EY. CONFIDENTIAL 24 Source: Annual Report Vedanta Limited year end Mar 2020, Independent Auditor’s Report (Standalone) EY/SRB audited nearly every other material subsidiary

Legal name Auditor S.R. Batliboi & Co. LLP (“SRB”), Auditor of Vedanta Limited, is Amica Guesthouse (Proprietary) Limited eVolve Audit Avanstrat an affiliate of EY. Bharat Aluminium Company Limited S R Batliboi & Co LLP Black Mountain Bloom Fountain Limited EY Cairn Energy Gujarat Block 1 Limited VD & Co. Cairn Energy Hydrocarbons Limited VD & Co. Cairn Energy India Pty Limited EY Cairn India Holdings Limited VD & Co. EY/SRB found the time to audit nearly every Cairn Lanka (Private) Limited EY CIG Mauritius Holding Private Limited EY other material subsidiary. CIG Mauritius Private Limited EY Copper Mines of Tasmania Pty Ltd EY ElectroSteels Limited Lodha & Co Fujairah Gold FZC EY Why not CIHL / CEHL? Goa Sea Port Private Limited S R Batliboi & Co LLP Hindustan Zinc Limited S R Batliboi & Co LLP Killoran Lisheen Finance Limited EY Lakomasko BV Pathak HD & Assoc LLP Lisheen Milling Limited EY Lisheen Mine Partnership EY MALCO Energy Limited S R Batliboi & Co LLP • Out of all subsidiaries where we have records, EY / SRB Maritime Ventures Private Limited S R Batliboi & Co LLP audited 33 of these 42 Monte Cello BV Pathak HD & Assoc LLP Namzinc (Proprietary) Limited EY Pradip Multi Cargo Berth Pvt Limited S R Batliboi & Co LLP SESA Mining Corporation Limited S R Batliboi & Co LLP • The ones not audited by EY / SRB are highlighted. SESA Resources Limited S R Batliboi & Co LLP Skorpion Mining Company (Proprietary) Limited EY Skorpion Zinc (Proprietary) Limited EY • The only material offshore subsidiaries are CIHL / CEHL Sterlite Ports Limited S R Batliboi & Co LLP Sterlite USA Inc Pathak HD & Assoc LLP Talwandi Sabo Power Limited S R Batliboi & Co LLP Thalanga Copper Mines Pty Ltd EY • The only subsidiaries where we saw an auditor change this THL Zinc Holding BV Pathak HD & Assoc LLP year are CIHL / CEHL THL Zinc Limited EY THL Zinc Namibia Holdings (Proprietary) Limited EY THL Zinc Ventures Limited EY Vedanta Lisheen Holdings Limited EY Vedanta Lisheen Mining Limited EY Vizag General Cargo Berth Private Limited S R Batliboi & Co LLP Western Clusters Limited PKF Liberia CONFIDENTIAL 25 Source: Company Reports. Stewards of our Capital: Vedanta Limited Independent Directors

CONFIDENTIAL 26 Stewards of our capital

Vedanta Limited Independent Directors

Source: Annual Report Vedanta Limited, year end Mar 2020 CONFIDENTIAL 27 Logos: Directorship in other Listed Companies in India EXHIBIT 3

Kyma letter sent to Vedanta Board of Directors, dated 30 Oct 2020

Attention: The Board of Directors, and in particular, Mrs Lalita Dileep Gupte, Mr Krishnamurti Venkataramanan, Mr Upendra Kumar Sinha, and Mr Mahendra Kumar Sharma

Dear Mrs Gupte, Mr Venkataramanan, Mr Sinha, and Mr Sharma,

I refer to my letter dated 15 October, which requested a response by 20 October. Other than the Company Secretary writing to inquire about our holdings, which we responded to promptly, we have had no substantive response. In the meantime, Kyma has continued its diligence into Vedanta Limited and its group subsidiaries. Our findings are highly concerning and suggest a standard of governance that is wholly inconsistent with a company of this size and importance. We have summarised our sources and information in the attached presentation. In summary, 1. We have learnt more about the loan that has been granted to Parent. The borrower for $293 million is Twin Star Holdings, a direct holding company of Vedanta Limited. For the reasons stated in our 15 October letter, no reasonable person could argue this transaction with a related party is on “arms length” terms.

2. By its very nature, this is an apparent contravention of the 2013 Companies Act. In particular, Kyma believes this loan is not compliant with the duties of Independent Directors as outlined in our previous letter.

3. The lending entity for this dubious money transfer is Cairn India Holdings Limited (“CIHL”). CIHL is a highly material subsidiary for Vedanta Limited, comprising $2 billion in assets. This is c. 10% of Vedanta Limited standalone (unconsolidated) assets. As a proportion of Vedanta Limited book equity, it is even more material, at 20%.

4. CIHL is a Jersey company, and its main asset is a wholly owned subsidiary, Cairn Energy Hydrocarbons Limited (“CEHL”). CEHL is a Scottish company, registered in the United Kingom, and is engaged in the exploration development and production of oil and gas in Rajasthan.

5. We note that CIHL has some disturbing disclosures in its accounts.

a. First, CIHL has borrowed $500 million bank debt, supported by a Vedanta Limited guarantee. As such, the money is borrowed by a Jersey company, using a corporate guarantee from a listed Indian company. b. Second, that money has been used to make the loan to Twin Star, after year-end. We believe there may be actionable cross-border remittance concerns, due to the corporate guarantee

6. We are extremely concerned that the governance controls in place at CIHL seem to have failed. In part, this seems attributable to the board structure, with professional service directors that have multiple board appointments.

7. Far more concerning is the appointment of an obscure accounting firm, to audit these very material subsidiaries. Until 2019, CIHL and CEHL were audited by EY in London. Starting 2020, these entities have switched to VD & Co. for “Special Purpose Audit”.

8. Our understanding is that CEHL, as a UK company, requires a statutory audit. You will no doubt be aware that VD & Co has no such authorisation to audit UK companies.

9. Vedanta Limited’s auditors place great reliance on the subsidiary level audits. We also note that EY continued to audit the vast majority of other subsidiaries. These are the facts. A reasonable investor might speculate that in light of the dubious activities being undertaken at CIHL and CEHL, EY refused to sign off on these accounts. We are still working with counsel on a) remittance issues, as we are concerned about potential circumvention of FEMA, and b) Companies Act compliance matters. We are also analysing further transactions at certain of the Company’s offshore subsidiaries. We trust you will agree that we are raising very serious issues in this letter. We note you have not provided a substantive response to our 15 October letter. Please do so now. We urge you to respond to us, and to the capital markets, with a clear plan on how you intend to address these control and audit deficiencies. One obvious way to reassure investors that nothing untoward is occurring, is to commission an independent special audit by a “big four” accounting firm. We would request your response by no later than 5pm London time, 4 November 2020. Failing a satisfactory response, we intend to issue our findings to the public capital markets and regulatory authorities.

Yours sincerely,

Akshay Shah Chief Investment Officer Kyma Capital Limited 22-25 Portman Close London W1H 6BS

Kyma letter sent to Vedanta Board of Directors, dated 15 Oct 2020

15 October 2020

Attention: The Board of Directors, and in particular, Mrs Lalita Dileep Gupte, Mr Krishnamurti Venkataramanan, Mr Upendra Kumar Sinha, and Mr Mahendra Kumar Sharma

Dear Mrs Gupte, Mr Venkataramanan, Mr Sinha, and Mr Sharma,

Introduction I write on behalf of Kyma Capital Limited, a UK based investment manager. Kyma Capital manages investments of behalf of a co-mingled fund and its underlying investors (together, “Kyma” or “we”). We own a beneficial interest in Vedanta Limited (“VL” or “the Company”) common equity, both through the Indian NSE and BSE listings and United States NYSE ADS. I am Chief Investment Officer at Kyma and have spent the last 20 years investing in undervalued and undermanaged companies, often as a result of highly leveraged capital structures. Before co-founding Kyma, I was senior managing director at the Blackstone group.

Summary of Kyma Concerns Kyma notes with grave concern your quarterly earnings report earlier this month that states loans and guarantees worth $1 billion will be provided “to its parent Vedanta Resources (VRL)”, and that $307 million had already been given before the launch of the offer.1 You will no doubt be aware of the precarious financial position of Vedanta Resources Limited (“VRL” or “Parent”). For the reasons we outline below, Kyma believes this transaction, if allowed to proceed, would: - result in a wholly improper transfer of value away from Vedanta Limited public shareholders; - be a direct preference transaction in favour of VRL; - be a conscious dereliction of duty by the Board, by approving a related party transaction on terms no prudent person could consider arms length; and - demonstrate blatant lack of due care, diligence and skill by the Independent Directors, thereby exposing themselves to great potential liability.

1 Vedanta Limited S.R. BATLIBOI & Co. LLP, June 2020, Review report

The Transaction Your independent auditor SR Batliboi states that: “the Company’s wholly owned overseas subsidiaries have committed to provide loans and guarantee to its parent company (including its subsidiaries) aggregating to USD 1.05 billion, which have been partly utilized by June 30, 2020.” They further state that “as part of its cash management activities, during the quarter ended June 30, 2020, the Company’s overseas subsidiaries have extended loans of US$ 307 million to Vedanta Resources Limited (VRL) and its subsidiaries repayable by June 2021.” We note the Company requested, and received shareholder approval for, increase in limits u/s 186 of the Companies Act, 2013 in June 2016. This limit is Rs. 80,000 crores, which roughly equates to the USD 1.05 billion mentioned above.2

Precarious financial position of Parent Your own independent auditor SR Batliboi is raising concerns about this loan. “Owing to inherent uncertainties caused by the fact that the parent company has reported a material uncertainty relating to its going concern and a funding shortfall in a plausible downside case, in its most recent financial statements for the year ended March 31, 2020, we are unable to comment on whether adjustments… are required to be made … to record any impairment in the carrying value.” Parent’s statutory auditor Ernst & Young raises a material uncertainty relating to going concern in its FY2020 report. EY highlight a “number of material uncertainties that may cast significant doubt on [Vedanta Resources Limited]’s ability to continue as a going concern”.3 In particular, they note the c. $2.2 billion repayments to be made by the Company in the 21-month period to 31 December 2021, and highlight the “funding shortfall that may be in the order of $2.5 billion in the period to 31 December 2021”. This is pretty damning evidence, from your own auditor, as well as Parent’s auditor.

2 Vedanta Limited Annual Report 2016-17, page 172 3 Vedanta Resources Limited Integrated Report 2019-20, Independent Auditor’s report, page 110

Risk-reward framework for this $1 billion loan Given the very significant risks of lending into this near-insolvent entity, how did the Board of Vedanta Limited price the potential returns? Needless to say, the Company has multiple possible alternatives with this money, including leaving it on deposit with a bank, paying down its own debt, returning capital to shareholders, or further investing in the business. By consciously choosing to loan this money to a distressed entity, you must have evaluated the return profile of this loan. The capital markets are providing an assessment of what third party creditors charge for lending to VRL, on an arms length basis. How have you priced this risk? Your stakeholders, particularly the public shareholders, request and require an explanation in this regard.

Board Duties After taking advice from local legal counsel, we are very concerned about the conduct of the Board, and particularly, of the Independent Directors in signing off on this transaction. Your duties and responsibilities are laid out in law. As per the 2013 Companies Act: the general duties of directors under the CA 2013 are as follows: to act in good faith in order to promote the objects of the company for the benefit of its members as a whole; to act in the best interest of the company, its employees, shareholders, community and for the protection of environment; to exercise due and reasonable care, skill and diligence and independent judgment;6

4 See Exhibit 1 5 See Exhibit 2 6 Companies Act 2013, Chapter XI, Appointment and Qualifications of Creditors, 166. Duties to Directors

Also, Under the law of agency, duties of skill, care and diligence are imposed on directors. On the other hand, law of trusts impose fiduciary duties on directors. Accordingly, directors are the trustees of the company's money and property, and also act as agents in the transaction which they enter into on behalf of the company. Directors are liable as trustees for breach of trust, if they misapplied the funds or committed breach of byelaws of the company. A director is expected to perform his duties as a reasonably diligent person having the knowledge, skill and experience both of as person carrying out that director's function and of that person himself.

Finally, a director can also be made liable for fraud. "Fraud" in relation to affairs of a company includes "any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss".8

Kyma assessment In light of the facts and law stated above, we are dismayed that you, the Independent Directors, have allowed this transaction to be approved. It seems the loan was signed off during the quarter ending June 30. This is also the same quarter when the Company received a delisting offer from Parent. By agreeing to lend money to Parent, it is apparent that the Company was, directly or indirectly, funding its own delisting. In any event, we have not seen any disclosure to shareholders on this matter, at the time of the proposed delisting. If Vedanta Limited is allowing its own property and assets, whether held directly or through a subsidiary, to be used for lending into Parent, it is an immediate loss of c. 40-45% of amount disbursed. We would respectfully submit that the Board’s approval of this transaction, despite the precarious financial position of Parent, is a clear breach of your duty of skill, care and diligence. By not acting diligently, Kyma believes that the Independent Directors are opening themselves to great potential liability.

7 Companies Act 2013, Chapter XI, Appointment and Qualifications of Creditors, 149. Company to have Board of Directors (12) 8 Companies Act 2013, Chapter XXIX, Miscellaneous, 447. Punishment for fraud

Kyma Capital Limited, a limited company incorporated in England & Wales with registered number 11237279 and registered office address 22-25 Portman Close, London W1H 6BS, United Kingdom. Authorised and regulated by the Financial Conduct Authority, FRN 805771 No doubt you will be aware there is a strict regime governing Related Party Transactions. We note the shareholder approval for increase in u/s 186 limits voted through by shareholders in June 2016.9 However, that shareholder authorisation doesn’t relieve the Board of its duty of care and diligence. That authorisation was granted at a different time, and in no way obviates the ultimate duty of the Board to act in the best interest of the Company. We are currently taking legal advice on whether this might also constitute fraud, by way of “abuse of position committed by any person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders”10. It is our view that this is a clear-cut case of siphoning off funds and value that belongs to Vedanta Limited, and all its stakeholders. By providing this “support” to Parent 11, this is a clear transaction at undervalue. We believe the Board, including the Independent Directors, is in connivance of this undervalue transaction, and if so, we will hold you to account to the fullest extent possible.

Third Parties India Inc. rightly aspires to have world class capital markets. Behaviour and actions as we see here prompt a race to the bottom and devalue efforts by all right minded stakeholders. We trust that given the credentials of the Independent Directors, you will have dealt with all of our concerns in your due diligence before you signed off on this transaction. We would appreciate your full and frank explanation to this effect. Absent a satisfactory explanation, we will be compelled to raise the matter with pertinent regulatory and legal authorities: - In the first instance, we anticipate reaching out to the stock exchange regulator, SEBI. - We also note that Vedanta Limited is a United States SEC filer. We are currently awaiting counsel advice on our options with the SEC. - We are puzzled how the lending banks at Vedanta Limited have allowed this cash disbursement to a financially challenged, and near-insolvent, Parent. This is particularly remarkable given the recent focus on other “Bad Boy Billionaires”. As custodians of public (taxpayer) money, we will encourage the relevant stakeholders to look into this act of largesse. - We are still working with counsel on a) remittance issues, as we are concerned about potential circumvention of FEMA, and b) Companies Act compliance matters. Once we have our findings, we expect to write to you again.

Given the very significant economic value at stake here, we would request your immediate confirmation that no further fund disbursement will be approved, and existing loans to Parent will be recalled immediately. Any failure to do so is a clear attempt to siphon funds away from the Company and its stakeholders, for the direct and illegitimate benefit of one particular shareholder.

9 Vedanta Limited Annual report 2016-17, page 172 10 Companies Act 2013, Chapter XXIX, Miscellaneous, 447. Punishment for fraud 11 The Economic Times, India, “Listed Vedanta Ltd to Give $1-bn “Support” to Parent”, Printed version 14 Oct 2020

Yours sincerely,

Akshay Shah Chief Investment Officer Kyma Capital Limited 22-25 Portman Close London W1H 6BS

Exhibit 1: Price graph of the VEDLN 6.125 2024 bond

Source: Bloomberg. As of 14 Oct 2020

Exhibit 2: Yield graph of the VEDLN 6.375 2022 bond

Source: Bloomberg. As of 14 Oct 2020